Fresenius agrees to $6.42bn deal for Spanish healthcare group Quironsalud

German healthcare company Fresenius said on Monday that it had agreed a $6.42bn leveraged buy-out for Spanish hospital operator IDC Salud Holding, commonly known as Quironsalud.

CVC Capital Partners have a controlling stake in Quironsalud, which runs a network of 43 hospitals, 39 outpatient centres and has 35,000 workers.

The move is the first outside of Germany for Fresenius, and will be paid for in cash almost entirely financed by debt (€5.36bn of debt and €0.4bn of share issuance), according to a statement from the company.

"For Fresenius, this acquisition is another strategic step towards offering quality and yet affordable care for patients worldwide," said Stephan Sturm, Fresenius CEO.

Founder and CEO of Quironsalud, Victor Madera, is expected to continue to manage the group that was created just two years ago by the merger of IDC Salud and Grupo Hospitalario Quiron.

The statement said the transaction was expected to be finalised by the end of 2016 or early 2017.

Patrick Wood, analyst at Citi, has upgraded Fresenius to "Buy", citing "strong topline visibility" and "inflecting earnings growth".

In a separate note, Wood pointed out that the company has done well in its running of Helios in Germany, increasing its margins from 6.5% in 2005 to 11.5% in 2015.

Pointing to the already fully-integrated Rhoen Klinikum, Wood said Fresenius had a solid track-record of hospital integration.

As of 1148 BST shares in Fresenius were advancing 0.34% to €80.59, having hit an intra-sesion high of €81.45, with the stock changing hands at approximately 1.6 price-to-sales, giving the firm a market capitalisation of €24.73bn.